International donors, who provide 40% of Malawi’s budget, froze the vital aid last year after it emerged that millions of dollars had been siphoned from government coffers in what has come to be known as the Cashgate Scandal.
The donors from the continent, Europe and various organisations met to review last year’s decision and agreed that “…challenges in public finance management still remain serious”, according to Alexander Baum, chief of the EU mission to Malawi.
In February, a report commissioned by President Banda found that $30m had gone missing in a period of 6 months. Senior ministers were implicated in the scandal and it has forced her to fire her entire cabinet.
“More action is required to tighten the system to avoid continuous leakages,” said Baum, “We recognise that a lot has been done in the past months, but the payment system still remains very weak”.
Banda’s government has blamed loopholes in the payment system that was introduced in President Bingu wa Mutharika’s administration.